Nozzolio Says Empire Zone Reform Could Hurt More than Help ROCHESTER, NY (WXXI) - An upstate senator is crying foul about one of the governor's reform measures.

Republican Mike Nozzolio represents the 54th state senate district which includes parts of Wayne, Seneca, Cayuga and Ontario counties. He says the requirement enacted in the recent state budget, that all businesses receiving Empire Zone benefits be recertified to ensure they're meeting job creation requirements, could wind up being a job killer.

Nozzolio says the move came at the last minute, and didn't give businesses time to prepare their tax returns. The Republican says that lack of warning puts businesses in limbo, because they don't know if they'll be recertified, which would determine whether or not they'll be on the hook for taxes that they hadn't budgeted for.

Matt Anderson, a spokesperson for the New York State Division of Budget, says delays in providing tax benefits to businesses will be short - in the range of a few months - and that the reform measure was necessary, to weed out companies that don't deserve Empire Zone benefits.

"It appears the senate minority's position here is that we should simply continue the status quo by sending out millions of dollars in additional taxpayer money to companies that are abusing the program and not creating jobs ... we think that the taxpayers deserve better and that we should root out waste, fraud and abuse in this program and not just continue the status quo of a program that most people acknowledge is deeply flawed. We want to make reforms to it."

Anderson says many companies in the Empire Zone program entered years ago and signed long-term contracts, which means they're receiving benefits without having to live up to more stringent rules. That means some businesses are getting benefits, without creating jobs or making an economic impact.

Nozzolio says he's not arguing against reform in the Empire Zone program, but he says asking businesses to pay taxes they thought would be abated sends the message that New York State government is mercurial.

"Every program in government continually needs reform ... the question really is how you go about that and how you establish a process that's reliable and that gives businesses an enterprise opportunity and notice."

Nozzolio says businesses found out on April 15th that they would have to be recertified, and that some businesses that wouldn't have had to file taxes under the old rules were forced to do so at the last minute. A spokesperson for the Empire State Development Corporation (ESDC) says that all businesses that are part of the program have always had to file tax returns, and that the reform law didn't change that.

Businesses that are recertified under the program will have to refile their 2008 tax returns to get their benefits. ESDC says the first certifications should start coming at the end of June, and may be completed earlier. Businesses that are not recertified won't continue receiving benefits.

The Empire Zone program provides a host of tax incentives, including property, sales and state tax abatement. It costs the state about $600 million annually, but Anderson says the reforms that are being enacted will save taxpayers $90 million. © Copyright 2009, WXXI